Six key trends will determine Class 3-7 medium-duty truck lifecycle costs in the 2010 calendar-year. They are diesel prices, acquisition costs, resale, maintenance costs, replacement tire expense and environmental regulatory requirements.
1. Diesel Price Trends
Diesel prices are the most significant factor that will influence operating costs in the 2010-CY. However, future diesel prices remain somewhat fuzzy. The most recent (Nov. 10) forecast from the Department of Energy projects CY2010 diesel prices at $2.94 per gallon, which will be higher than the 2009 average, yet 86 cents less than the 2008 average price. "We expect that the new emission requirements on the MY2010 diesels will impact fuel economy. Some manufacturers are claiming improved fuel efficiency with 2010 engines; we are anxious to see if real-world use bears this out. Of course, future oil prices will ultimately drive operating expense," said Steve Byrd, fleet services manager for PHH Arval.
One possible harbinger of the future direction of diesel prices is the commodity futures market for diesel fuel.
"If the futures market is any indication, prices will be relatively flat over the next six months. This should result in the first quarter of the model-year being lower than MY2009, the second quarter trending higher, with the rest of the year close to MY2009," said John Bauer, manager, fleet analytics for Wheels Inc.
However, a return to improved economic conditions will likely cause upward pressure on diesel prices due to increased demand.
2. Acquisition Trends
The national macro economy is an uncontrollable factor that will continue to exert a strong influence on truck fleet costs. "These cost trends will undoubtedly continue as the economy struggles. Fleets are tending to delay new-vehicle purchases and keep existing fleet vehicles in service longer, which adds to long-term maintenance and repair costs, especially as more powertrain components fall out of warranty terms," said Charlie Thomas, manager, PHH Vehicle Maintenance Assistance.
In addition, 2010 emission standards will introduce entirely new maintenance items, plus increase the initial acquisition cost of trucks. One possible reaction to higher acquisition prices is an uptick in used-vehicle sales. "The down economy will lead cautious buyers to go with used vehicles because they won't have the newer emissions equipment," added Byrd.
The increased maintenance costs due to the new 2010 emission standards will not be felt in the near-term. "The complexity of the 2010 emission standards will not significantly impact maintenance costs until late 2010 and after," said Eric Strom, maintenance and safety product manager for GE Capital Fleet Services.